- Euro suffers from the weight of the pandemic numbers and ECB stimulus hopes.
- Global equities are in the green.
- Dollar selling not in vogue despite better risk sentiments globally.
EUR/USD was trading around 1.1707 after hitting resistance around the declining 5-day moving average now at 1.1725, before the European opening today. The struggle in the major comes amid an improved risk sentiment in the global markets.
S&P 500 futures are up by 0.5 Percent along with Japan’s Nikkei and Australia’s S&P/ASX 200 trading in the green. The global equities attract buyers on the increased hopes of additional US fiscal stimulus before the presidential elections.
The bulls are also pinning hopes on the possibility of a vaccine from Pfizer before the year-end.
The US Dollar usually hits a gloomy mood on the return of global risk confidence, but the action in EUR/USD this time shows a lack of dollar selling.
The pair’s lack of strength might be stemming from the second wave of coronavirus spread across the Eurozone. A case in point is the surge to a record daily high in the number of new patients in Italy, forcing the government to impose further restrictions. The pandemic is also spreading vigorously in the US with a fifth continuous day of cases above 50,000.
Moreover, the traders are pricing in more ECB stimulus, and the effect is visible in the widening of US-German yield differentials.
The immediate triggers for the EUR/USD will be the German Bundesbank’s monthly economic report and the ECB President Lagarde’s speech, due during the European trading hours. Federal Reserve Chairman Powell’s speech will attract attention later in the US trading hours.